PenFed Personal Loans Review

Best credit union for personal loans

If you need a small personal loan, PenFed is one of few that makes $1,000 personal loans (and less) to its members. It also makes loans up to $50,000. If you have very good credit; the lender offers competitive interest rates, low fees, and loan terms as long as five years. You can use its loans for a variety of personal expenses, including credit card consolidation, debt consolidation, and home improvement.

Here are the most important features you should know about PenFed personal loans:

PenFed Pros and Cons

PenFed personal loans review

Established in 1935, PenFed serves more than 2 million credit union members. It offers personal loans to borrowers in the District of Columbia, Guam, Puerto Rico, Okinawa, and all states except Massachusetts.

PenFed is also unique in that it offers a wide range of loan amounts — you can borrow as little as $600 or as much as $50,000. What’s more, PenFed doesn’t charge an origination fee or prepayment penalty. Considering that other lenders charge as much as 10% to originate loans, PenFed borrowers stand to save a significant amount of money, especially on larger loans.

If you’re approved for a loan with PenFed, you’ll typically receive your loan funds within two to four business days after verification.

How to qualify

To get a personal loan through PenFed, you’ll need:

• Good to excellent credit
• Stable income with a debt-to-income ratio that shows you can comfortably afford your loan payments

While you don’t need to be a PenFed member to qualify for a loan, you’ll have to join the credit union if you decide to accept the loan. The process is easy, and military affiliation isn't required. When you receive your loan, PenFed will open a savings account for you preloaded with $5 to establish your membership.

Also keep in mind that PenFed is one of the few personal loan lenders that allows applicants to apply with a cosigner. This could help you get approved if you have less-than-perfect credit or have insufficient income. Applying with a cosigner might also help you qualify for a lower interest rate.

Learn More: Good Credit Personal Loans

Repayment

PenFed’s personal loans have repayment terms ranging from one to five years. The right loan term for you will depend on your unique situation. A short one-year term minimizes the amount of interest you pay and is especially suitable for small loans. A longer term stretches out payments on larger loans to keep them affordable.

Learn More: Personal Loans for Fair Credit

How PenFed compares to other lenders

The best way to determine whether a particular lender is right for you is to compare its loan features against those from competing lenders. Here’s a look at how PenFed stacks up against two other Credible partner lenders:

How to take out a personal loan with PenFed

Getting a prequalified rate from PenFed won’t affect your credit score. If you like what you see and want to apply, you’ll need to verify your identity and document your income by submitting pay stubs, bank statements, and W-2 forms. PenFed will tell you exactly what documents it needs to process your application.

You don’t have to be a PenFed Credit Union member to apply for a personal loan, but you must join if you want to accept your loan offer.

Before applying for a PenFed loan, be sure to shop around with as many lenders as possible to get a personal loan that’s right for you. Credible makes this easy. You can compare rates from multiple lending partners — including PenFed — in two minutes.

After you’ve chosen a lender, you can complete your application online, close your loan, and get the money you need.

What to consider before applying for a PenFed personal loan

PenFed is a solid option for borrowers with good credit who want a wide range of loan amounts and flexible repayment terms. But before you apply for a loan, keep these things in mind:

• May not qualify if you have bad credit: PenFed requires applicants to have a minimum credit score of 760 to qualify for one of its loans. If your score is lower than that and you don’t have a cosigner with good credit, you may need to look for a different lender.
• No loan amounts greater than $50,000: PenFed’s maximum loan amount is only $50,000, which is lower than the maximum of some other lenders. If you have a larger home improvement project or need more money to pay off credit cards, you’ll need to find another lender.

No two borrowers are alike, so the best loan for someone else might not be the best one for you. Credible makes it easy to evaluate loans and rates so you have all the information to make the right choice for your needs.

Keep Reading: Personal Loans for Bad Credit

Kat Tretina contributed to the reporting for this article.